Husband and I are getting ready to draw up new Wills and create a Trust. I currently have 5 Yr term CD's in 4 different credit unions. I doubt I can re-title and won't early withdrawal, therefor those may have to stay POD only. In addition, I sort of freaked out when Attorney recommended putting our home in the Trust. I am not sure why, I think since I had never given that any thought. Does anyone have info on Financial Institutes that re-title accounts or Trust tips in general? Thanks
Answers
Second, before I say anyting nore, I am not a lawyer, so I am not resprensting this as legal advice. This is what I have learned from my lawyer in creating and now using my living trust. While not formal legal advice, you can use this as guidance, hopefully good guidance, but confirm (but not from the bank, they will give you wrong in,o too often, as JeffinEasternFL notes of their competence). Further, and important, different states have different laws about trusts, including living trusts. So, your details might very a bit in your state, but I would not expect a major difference - yet, as the saying goes, details can make all the difference. Your trust should say under what state's laws it is operating.
As for converting your existing CDs over to the trust name, best place to ask is the place holding the CDs. Not all financial institutions will even take an account in the name of a trust.
RE your comment about keeping them as PODs. You should be able to list the trust as the beneficiary. The bank or CU does not need any paperwork for that, they will not be administering the trust. And in fact, if a revocable trust, you might change it later, you don't want an obsolete version on file. Besides, what the trust has to say is none of their business, it is your privacy. I note, they often will use their standard form for listing a beneficiary, and it typically will be asking for info about a person. Name would be the full name of the turst, and birth date would actually be the execution date of the trust (the date you signed it and had it notarized). If you have a tax ID number for it, you use that instead of a Social Security number. If a living trust, you can use it under you SS number until you die, and then the trustee would get a tax ID number. But you can get a tax ID numebr for it now, if you want to (I'm not sure how that impacts your tax filing, you might have to do a separate filing for the trust under that tax ID number).
They also should not need anything more than the certificate of the trust to create an account in the trust name. The certificate shows who the trustee is, and some other info. The financial institution does need that so that they have a formal document that tells who the trustee is, and what little other information is on the trust certificate. You likely are trustee of a living trust until you die, but at death, someone else listed in the trust takes over as trustee. Yes, as JeffinEasternFL says, the financial institution might have other things to say, that is too common. They might say they need the full trust document, but they don't. One told me the certificate is typically the first three pages of the trust. No, it is not, and in fact, a new certificate is needed every time the trustee changes, which can happen multiple times. At least, mine is not the first few pages, it is a separate document serving as the certificate. My lawyer provided that. See above, maybe this is one of the details that differs by state.
If you list the trust as POD beneficiary instead, you would get FDIC or NCUA insurance based on the number of beneficiaries in the trust and how much each gets. There are calculators at FDIC and NCUA websites, and there you would list each beneficiary separately. But you do not list those indivicuals inther trust on your bank account, you list only the name of the trust there. Listing each beneficiary in the trust on your bank account would undermine the trust -- yet as JeffinEasternFL says, many of these places are not all that competent, they will tell you what I just said is not so, but they are wrong, I got it direct and in writing from the FDIC and from the NCUA.
I ran into one CU saying it is not possible to list a living trust as beneficiary, teh trust can only be involved as the name of the account holder (not so, I list it as beneficiary at many places, and NCUA and FDIC specifically said that is fine and dandy. I choose to doit that way, fund the turst at my death, it seems like the simplest way to me. The trust will inherit all). If you have more than one beneficiary in the trust, that would not be on the record at the bank or CU, so if they go under and are dissolved, you then need to show that trust document to the FDIC or NCUA to get your full coverage -- that is how it is done, both told me.
I hope some of this is helpful.
I do not have any annuity, I'm not sure how that gain is considered. But you should ask the lawyer when you talk with him/her, the gains might get wiped out tax free at death. Of course, if they are considered to be interest or dividends, maybe not, but in that case, wouldn't the tax have been paid each year as they came in? If they are capital gains, I suspect they do get wiped out at death; no one has mentioned any difference in where the capital gains come from. Of course, any particular state might handle capital gains differently, perhaps that is where you got hit on capital gains.
Also, you need to pay some attention to the laws after you are all set up. Laws can be changed, and they are from time to time. So, you need to make sure your plans have not been undermined. If so, and the trust is revocable, you can change it to whatever then is best.
Took me three years of calling my state rep every week as well as emailing the office until he took it in an election year to the right committee. If your rep doesn't belong in the committee that takes care of this stuff they will ignore you. Drive them crazy until you get it done and if you have some dirt on them it gets things done also. Get your friends to call them also.
This is the same way I was able to get my grocery store to get top tier gasoline. With beneficiaries like a trust no one knows anything.
1). Attorney recommends a trust yet provided no assistance in getting title to assets changed…that is a nonstarter in my world!
2). You all have too much gross income…you’ve proven you all can “live” on the net which is probably just over 50% depending on state you live in. Unless you live in community property state (stepped up basis for most/all property) why don’t you get out of the asset feeding business of debt, liability, etc.?
3). In this scenario you pass over the disabled adult too quickly in my view..first action item from my perspective…get this person set up right with Medicaid/Medi-Cal rules and that may be the type of trust you quickly passed over…in my view
4). Get POAs set up!
5). Get out of debt which is….
6). See how you can reduce expenses THEN talk to a different attorney and see about retitling assets that remain
This is intended to be constructive and provide a different view of “your” world
Good Luck
I just sent you 2 links by personal message that you might find interesting and informative.
Those two individuals are your top priorities from what you’ve said…otherwise who are you planning for? You are where you are!
Do not forget why two (if not more) states have a “bad” reputation…b/c of so-called welfare etc. Those two have liberal policies on handicapped individuals and perhaps a move may be in order? For whom?
PS Texas is not one of them!
Structured incentives (for your daughter!?) usually work with a default of a charity to challenge…usually works! Need to have an entity to enforce your goals…a charity usually may work. Otherwise…who? Good Luck
Trusts can have all kinds of things to calculate how much any individual gets, details that cannot be part of a POD. I’ve set mine up for some tax avoidance that could not be accomplished as beneficiaries on a POD.
When the time comes, it is easier to deal with all that if you consolidate it under one roof, the trust. Depending on how much money you have, you might have a lot of bank and CU accounts and other accounts, and all the beneficiaries would have to run around to all of those they are on.
And as I have noted, you can title the accounts in the trust name, or you can list the trust as beneficiary. Of course, if you do the latter, the trustee will have to contact all the banks and CUs where you list the trust as beneficiary and have the money moved into accounts under the trust name. But they would have to contact all the accounts anyway to notify they are the trustee, at that contact, they just also say, either cash out the account to the trust or make it a trust account.
One point, if the CD were in the trust already, then I’m not sure you could close it without an EWP. If it is not, my experience is that the banks or CUs will close it and turn the money over to the POD beneficiary, which could be the living trust, without an EWP. After all, the financial institution can’t hold it to term, because the POD terms say it pays at death, not four years later. The trustee would probably want to liquidate the trust to its beneficiaries sooner than later, not have to wait maybe four years for a five years CD to mature, or suffer an EWP that could have been avoided.
Also be very careful of the estate lawyers that are usually trying to get your money to invest, do your taxes and take over everything. It is better to go to your area senior center that help seniors in your area to get names of someone they recommend.
I have a cousin who son does trusts, annuities and all the investments in his firm and he went to him because it was all free. He asked his dad how much he needed to live on and he told him $110,000 a year and they bought different products that he cannot get out of and has been stuck in IRMAA since the mid 2000's as he wife died several years ago and is single. I did not know his son did it and when he told he cannot change anything I said the firm that did that did you no favor. Have you thought of suing or talking them. He said it was Chuck my youngest son.